An independent survey of property experts conducted by Herron Todd White has found that approximately 84% do not expect the federal budget to deliver meaningful improvements to housing supply or affordability outcomes nationwide — a finding that cuts against the government's stated rationale for its sweeping investor tax changes.
The survey result lands in the wake of two significant decisions made within eight days of each other. On 5 May, the Reserve Bank lifted the cash rate by 25 basis points to 4.35%, the third consecutive increase this year, effectively unwinding all of last year's relief.
Herron Todd White CEO Peter Maloney (pictured left) described the message from Governor Michele Bullock as unambiguous: "the board left the door open to further action, flagging second-round inflation risks and making plain it will do whatever is necessary to bring inflation to heel."
Then on 12 May, the federal budget introduced sweeping changes to property investment. Negative gearing on established residential properties purchased after budget night will be removed from 1 July 2027, preserved only for new builds and grandfathered for existing holdings. The 50% CGT discount has been replaced with cost-base indexation and a 30% minimum tax rate. The stated aim is to redirect investor appetite toward new supply and improve first-home buyer access.
If investor activity in established property contracts without a corresponding increase in new supply, rental stock tightens further, and the affordability problem the budget is trying to solve could worsen. Maloney flagged this tension directly, noting genuine concern that reducing the attractiveness of established investment property "will further tighten rental supply, which is the opposite of what a housing-stressed nation needs."
The government's $2 billion Local Infrastructure Fund is widely seen as insufficient to move the needle quickly enough to offset the supply impact of the investor tax changes.
Layered across the policy uncertainty is a market already running at varied speeds.
HTW residential director Travis Tonge (pictured right) described the current landscape as "a collection of markets within markets."
Perth, Brisbane, and Adelaide continue to perform strongly, underpinned by chronic undersupply and sustained interstate migration. Sydney and Melbourne are cooling, with monthly median values softening as listings rise and buyers operate with tighter budgets.
High borrowing costs have concentrated demand at the entry level, with the government's 5% deposit scheme intensifying competition for eligible properties.
Against that national backdrop, Tonge offered a measured note of conditional stability: "Barring a significant rise in unemployment or further interest rate hikes, the Australian property market appears well-positioned to maintain its current stability."
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
